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Upstream Cost Deflation: How much could costs of exploration fall?


Upstream Cost Deflation: How much could costs of exploration fall?

Report summary

Costs of exploration are falling as the industry adjusts to its new price environment. Many explorers have reacted by simply spending less. But what they really need is lower costs.

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This report includes 1 file(s)

  • Upstream Cost Deflation: How much could costs of exploration fall? PDF - 308.80 KB 7 Pages, 0 Tables, 3 Figures

Description

This Macroeconomics and Global Trends Insight report presents our research on this key topic, and draws out the implications for economies and commodity markets.

This report delivers a clear understanding of our unique global economic outlook and identify risks and uncertainties to watch out for.

Wood Mackenzie's global trends and macroeconomic analysis underpins all our commodity demand analysis, ensuring we continually deliver an integrated and consistent view.

Our comprehensive understanding of commodity markets gives us a unique insight into the pace of global development and the risks associated with it.

  • Costs of exploration are falling and have further to go
  • The industry expects its like-for-like costs to fall by 15% to 25%
  • Simplification could save a further 5%
  • And efficiency gains could save another 5%
  • US dollar strength a locally important factor
  • Full deflation could reach 33% by 2016
  • Lower costs will soften the blow of exploration budget cuts
  • Cheaper, simpler and more efficient

In this report there are 3 tables or charts, including:

  • Costs of exploration are falling and have further to go
  • The industry expects its like-for-like costs to fall by 15% to 25%
    • Service sector margins
  • Simplification could save a further 5%
  • And efficiency gains could save another 5%
  • US dollar strength a locally important factor
    • Potential impact of US dollar appreciation
  • Full deflation could reach 33% by 2016
  • Lower costs will soften the blow of exploration budget cuts
    • Announced exploration budgets, ranked by 2015 versus 2014 delta, and potential impact on activity
  • Cheaper, simpler and more efficient
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